In this major section of I’ll cover many specific techniques. Some
are more directly related to “how to scalp”, whereas several of the techniques
are more to support the other concepts. This section presents a collection of
“tidbits” that will later come together in the next major section of
titled “The Opportunities” that makes use of the techniques presented here.
Before we delve into the scalp trading opportunities, setups, and techniques
we first need to discuss how to do the mechanics of entering, modifying and
exiting trades.
In “Forex Surfing” I explained how to place “Entry Orders” (setting up a trade
to occur once a specific price is hit), so I won’t be discussing that here. What
I will cover is how to manually enter a trade at current spot price, modify your
stop, and manually exiting a trade at current spot price. These skills will be
explained with “scalping” in mind.
First of all it is important to note that most of the time you won’t be using
entry orders, only market orders (getting in at the current market price) to
place trades. Why can’t you use entry orders? Simply put you must place
entry orders at least 5 pips or more from the current market price, but as a
scalper you want to enter the market at the best price possible, which is at the
current market price once you believe it is time to enter into a live trade.
Please note that the following images show FXCM’s trading software. If you
use some other broker then be sure to be familiar with their software. Also
remember that in the future FXCM may change the look & feel of their
software so by the time you read this these images might be invalid. These
images are simply shown for illustration purposes – you need to be very
familiar with whatever trading software you actually use.
If you have ANY questions about how to use your trading software then
contact your broker’s FREE online help desk. Don’t be scared to contact
them because they are there just waiting around to be of help to you. They
will gladly answer any questions you have and it is EXTREMELY important
that you know how to use your trading software proficiently.
While actively trading you need to be able to “push the button” at a moment’s
notice. The simplest way to enter an order is to click on the “Buy” or “Sell”
side of your desired currency pair in the “Advanced Dealing Rates” window.

Once you clicked to either “Buy” or “Sell” a particular currency pair the
“Market Order” window will appear.

What you do is you set your “Amount(K)” to however many lots you intend to
trade, and you check the check-box to activate a stop. Your stop should be set
10 pips away from the current “Rate”, however if it is not the appropriate 10
pips then don’t worry about it now (unless you are not in a rush to enter your
trade) because you will be able to correct it immediately after your trade has
been activated. When you are ready to enter the trade live you simply click
the “OK” button.
Here is an important tip: Unless you have enough funds in your trading
account to trade 6 or more regular lots (and not trading less than 6 regular
lots) using proper equity management principles then use a “Mini account”
rather than a “regular account”. Currently (this is a relatively recent change)
FXCM (and other brokers to be competitive) now offers the same pip spreads
for mini accounts as they give to regular accounts. Furthermore, with a mini
account you can be much more flexible as you can trade fractions of regular
lots and thus more closely follow your 2% limit. You can trade up to 50 mini
lots in your mini account. To do this simply select the “Amount(K)” window
and type in the number of “K” you want to trade. 10K is one mini lot, 100K is
10 mini lots or equal to one regular lot, and 230K is twenty-three mini lots or
equal to two regular lots plus three mini lots.
Often when I am expecting to be entering a trade soon (but not immediately)
I’ll have the “Market Order” window open with all my trade details set and
just sit there (watching my charts) with my mouse on the “OK” button ready
to deploy at a moment’s notice. When doing this the “Rate” field will
automatically change to reflect the current market price, but the “Stop” price
won’t change. If the stop price becomes incorrect I simply fix it immediately
after the trade becomes activated.
After you have entered a trade live you will want to immediately reset your
stop to be at 10 pips (unless otherwise desired). In the “Open Positions
window right-click your mouse over the “Stop” and select the “Stop/Limit”
You will then be able to change your stop in the “Stop Order” window to 10
less than the “Open” price (the price your trade got entered at). Don’t worry
about adding the broker’s spread, you simply want your stop to be 10 pips
from your entered price.
Later when you change your stop loss order to a breakeven point (stop = open
price) or when you start trailing your stop to protect your gains you’ll simply
repeat the steps above to change your “Stop Order” as appropriate.
If you were to want to create a “Limit Order” (to exit your trade at a
predetermined price for a fixed profit) you simply right-click your mouse over
the “Limit” field in the “Open Positions” window.
A “Limit Order” window will then pop up and you can then set your limit
price to whatever price you consider appropriate based upon the scalping
strategies you use.
When you want to exit a trade manually (for reasons that will be explained
later in the eBook) as opposed to exiting by getting stopped out then simply
right-click your mouse on the trade in the “Open Positions” window, select
the “Close Position” option and the “Close Position” window will
appear. Simply clicking on “OK” will close your open position at the current
market price.
It is useful to have this window open during your active trade so that you can
click “OK” instantly (without fumbling around to get to this window) when
you need to get out of your trade ASAP.
Here is an extra tip that you’ll want to know: If you are trading multiple lots
(regular or mini) then you don’t have to exit all of them. By selecting the
“Amount(K)” to be less lots than you have engaged then you can select how
many of the lots you have open that you want to close. This is useful as
sometimes you’ll want to take some profits while letting a portion of your
trade remain active so that you could potentially score even more
pips. Usually you would have your stop set for breakeven or at a profit before
using this technique.
- - -
So now you know how to use the broker’s trading software to engage into
trades, modify existing trades (the stops & limits), and to manually exit trades
when needed. Please remember that if you have any questions about how to
do any of this then contact your broker for guidance.
I’ve mentioned it above but it bears repeating incase you are one of those
people who skipped reading the above (because you think you already know
how to do all the above stuff). When you think that you might soon be
entering a trade have the “Market Order” window open with all your options
set to the appropriate figures and have your mouse over the “OK” button
ready to click to enter the trade instantaneously when needed. Same thing for
getting out of a trade. When you are in the trade have the “Close Position”
window open with your mouse over the “OK” button ready to click to exit the
trade instantaneously when needed.

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